Transcript Chistyakov_Eng - EDRC - Economic Development and

Diaspora, external trade and FDI in
South Caucasus countries
Pavel Chistyakov, Russia (Centre for Strategic Research;
Geographic department of Moscow State University)
What can excuse the Russian intervention
to the topic?
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არც ისე წვამს, როგორც ქუხს or “a fish can not be
estimated in water”
Multiple fieldworks in all three countries
Sociologic research in 2007-2008 in Moscow (links to
diaspora, remittances, identity of migrants from South
Caucasus)
Affection to South Caucasus
Geographic structure of export
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>80% of Armenian export goes to countries where 70% Armenian diaspora
lives
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Near 60% of Georgian export is directed to countries bordering Georgia by
land or by sea .
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97% of Azerbaijan export is determined by oil contracts and configuration of
pipelines
40%
20
Armenia
10
Azerbaijan
5
Georgia
0
Russia
Germany
Netherlands
Belgium
Bulgaria
USA
UK
Italy
Iran
Ukraine
Canada
Spain
France
Georgia
Chine
India
Turkey
Azerbaijan
Armenia
%
15
Diaspora and sustainability
of external trade
Azerbaijan
2009/2007, %
100
80
60
40
20
Armenia
Georgia
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Liaisons with Diaspora
provides higher sustainability
of external trade compared
to extreme dependency of oil
export but it is more risky
than diversified economic
relations with neighbours
0
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Armenia showed how diaspora can stimulate external trade
during the period of rapid growth of the world economy. The
future challenge is to elaborate mechanisms how diaspora can
contribute during depressions
Diaspora inspires external trade: how it
works and what should be done
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Experience of Armenia
1) Diaspora raises demand
2) Diaspora helps to reduce
transaction costs of trade in
foreign countries
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“Corporate”
(eg: metalls, chemicals)
Challenges for Azerbaijan
1) Structuring and moving out of
“shadow” trade networks based
on kinship
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“Nostalgic”
(FMCG)
Challenges for Georgia
2)Collaborate
with
governments
providing
access to
markets
Dealing with
institutions
Exploring consumers’
preferences
Establishing businesscontacts
Geography of FDI: similar tendencies?
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Armenia
Cyprus
Lebanon
USA
Greece
France
Argentina
Germay
Russia
0
Russia
Cyprus
Czech Rep.
Kazakhstan
Azerbaijan
Virgin Islands
Turkey
Netherlands
UAE
UK
Others
Azerbaijan
Turkmenistan
Kazakhstan
Japan
USA
China
Ukraine
Germany
UK
Turkey
Russia
>85%
Georgia
0
70%
0
2000
200
400
600
800 1000 1200
Million USD (2004-2008 summarized)
80%
4000
1400
500
6000
1000
Structure of FDI by economic sectors
4000
Other services
Million USD (2007-2008 sum.)
3500
Potentially attractive for
Diaspora
3000
Financial sector
Real estate
2500
Achievement or loss of
control?
2000
1500
Diaspora doesn’t invest
in high added value
kinds of activity in
industry
1000
500
Construction
Transports and
communications
Energy sector
Industry
Agriculture, fishing
0
Georgia
Armenia
Why not?
Benefits and hazards of FDI made by
diaspora
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The key issue of policy towards diaspora’s investment activity is to keep
balance between corporate and governmental interests
Sector
Main benefit
Main hazard
Industry
Rise of productivity via
technologic modernization
Conservation of “heavy” structure of
economy and dependency on raw
market conditions
Energy
Reduction of accumulated
depreciation of funds and risks of
emergency
Dependency on energy companies
corporate policy
Transport
Opening borders of a country
Lost control of strategic objects in
politically not stable region
Real estate
Stimuli for construction, industry
and services
Growth of real estate prices
Finances
Availability of credit resources
and derivatives
Risk of capital outflow
Consequences in Russia
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Universal outlines of diaspora-policy
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Projecting of collective action institutions – online (eg: “diaspora-social
network” project startup) and offline
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Personalization as of liasons between object and subject of help – support
of concrete people by concrete people/villiges/small projects
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Creation of conditions for repatriation – temporary (eg: well qualified
youth) and permanent (eg: pensioners)
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Formalization of informal networks based on kinship.
International development institutions
should be mediators in process of
Diaspora-Motherland interference due
to higher level of trust to them
compared to local governments.
The feeing of affiliation to the state
Specification of the policy for South Caucasus
countries considering cultural differences
What can
unite
Diaspora
and country
Methodology
Arm
Ethnicity &
history
To direct efforts of Elaboration of the joint
diaspora to
concept of interrelationships
–exchange of commitments
reduction of
dependency on
diaspora
Az
Kinship,
fellowship and
traditions
To develop
“bridging” against
bonding
Regionalization of diasporapolicy - social networking
with territorial linkage
Geo
Spiritual unity
Individualization
and fragmentation
of diaspora
Shaping the set of event and
economic contacts
according to interests of
key-persons
Approach to
instruments
Thank You for Attention!
Pavel Chistyakov, Russia (Centre for Strategic Research;
Geographic department of Moscow State University)